CNU - Chorus

[bull....]

hey warthog, it was merely an observation from what i read in the newspapers but since you mentioned some things about him i had a look i see he was a communications man at vodaphone so i guess that sort of makes him a expert on spin. enough said back to the company

[craic]

Simply, sell up and move the money to TEL. There you can trade all you like with a few cents differential every day.

So it's basically a traders stock, personally I'm too scared to even trade this mongrel,would love to have a go at getting some of my money back but it's hard to step back into a fire with 3rd degree burns

[Harvey Specter]

couta, listen to your gut, its telling you not to do it! if you didnt get in at $1.3x you've well and truly missed the bounce. look at DILs chart to see what happens to a stocks price with bad news over its head. unless the story changes, Milford pumping away wont change the situation long term.

Half a Mill through today and holding up nicely. Will be keeping a close eye on it though.

[KiwiGreen]

Questions rather than feedback:

- Does your model account for imputation credits. As a solely NZ company, their dividends should be fully imputed.
- why did you choose 25c from 2021. How much does a lower figure of say 20c impact the valuation.

Nah I haven't included imputation credits - do you know what they are as a percentage of the dividend?

At 20c from 2021 I get NZ$1.77

I think someone asked where I got my numbers...yep purely based on EY recommendation plus an assumption from 2021 on wards....

"Chorus implements a dividend holiday in the second half of FY14, FY15 and the first half of FY16;


Between FY16 and FY20 Chorus reinstate the dividend at 50% of the FY13 dividend, or 12.75cps;"

(I didn't bother splitting the 2016 in half, but doing so takes about 5c off the valuation).

[Mista_Trix]

Nah I haven't included imputation credits - do you know what they are as a percentage of the dividend?

At 20c from 2021 I get NZ$1.77

I think someone asked where I got my numbers...yep purely based on EY recommendation plus an assumption from 2021 on wards....

"Chorus implements a dividend holiday in the second half of FY14, FY15 and the first half of FY16;


Between FY16 and FY20 Chorus reinstate the dividend at 50% of the FY13 dividend, or 12.75cps;"

(I didn't bother splitting the 2016 in half, but doing so takes about 5c off the valuation).

IMHO I think we've got a bit of upwards momentum left in the stock at the moment, even with all the negatives tallied it still seems underpriced.

[KiwiGreen]

IMHO I think we've got a bit of upwards momentum left in the stock at the moment, even with all the negatives tallied it still seems underpriced.

Yeh the problem is though it's just so hard to value the co. when the future is so unknown.

My valuation may end up being over 50% wrong. So then you have to try counter that uncertainty with a higher discount rate. I used a bog standard 10% discount rate but if I increased it to 12% for example it would drop 20c off the SP. I don't think there is justification for the SP to move too much in either direction until some 'real' news comes out that can help give more certainty to the future.

[Harvey Specter]

Nah I haven't included imputation credits - do you know what they are as a percentage of the dividend?

Assuming fully imputed, which it should be, gross dividend will be cash div/0.72 (ie. 28% of gross dividends is imputed)

[KiwiGreen]

Assuming fully imputed, which it should be, gross dividend will be cash div/0.72 (ie. 28% of gross dividends is imputed)

Ok so for the most recent 15.5c dividend owners received 15.5c plus 4.34c (15.5 * 0.28)? - I understand 0.72 is the maximum imputation ratio possible in NZ.

Or is the 4.34c is paid directly to IRD by chorus allowing the owners 15.5c tax free dividends?

[Harvey Specter]

Ok so for the most recent 15.5c dividend owners received 15.5c plus 4.34c (15.5 * 0.28)? - I understand 0.72 is the maximum imputation ratio possible in NZ.

Or is the 4.34c is paid directly to IRD by chorus allowing the owners 15.5c tax free dividends?

Getting off topic for CNU but:

imputation credits reflect income tax paid by the company to the IRD already. It stops the shareholder having to pay a second lot of tax for the same profit.

So the last 15.5c dividend had 6.02c of IC (15.5 /72*28)

[Poet]

So I see that Peter Dunne is about to be reinstated to cabinet. Anyone see a deal being made here?

At the risk of quoting myself - this is starting to look like the way the problem will be solved

Dunne to negotiate with parties and then lend his support to the govt to get the legislation through. I'm not sure whether he gets reinstated to cabinet before or after (but that will no doubt have nothing to do with his chorus support)

http://www.stuff.co.nz/business/indu...s-creep-higher
Chorus shares crept higher this morning as investors took some encouragement from a new report and fresh political developments over the weekend.
The shares opened 1 cent higher at $1.48.
A report by EY Australia (previously Ernst & Young), published on Saturday, said Chorus faced a $250-million funding gap because of lower wholesale copper broadband prices. That was even if it adopted extensive cost-savings measures, including not paying any dividends for two years.
But Forsyth Barr analyst Blair Galpin said it might be a relief to investors that the consulting firm did not identify a larger funding gap or suggest that it might be possible for the company to have a longer "dividend holiday".
The funding gap was "where people expected, but it removed doubt at the back of people's minds that there might have been a bigger number out there", he said.
Galpin said it was also positive that United Future leader Peter Dunne had indicated he was open-minded about brokering industry talks on Chorus and wholesale copper pricing.
Dunne told Fairfax Media in a report also published on Saturday that he might be willing to play a role in bringing parties together. The development was welcomed by the Telecommunications Users Association.
"It is positive from Peter, and if we can get a deal done it's positive from everyone's perspective," Galpin said.
Deutsche Bank analyst Arie Dekker said it was interesting Dunne might play a role.
"There are parties that are open to it," Dekker said.

But a possible obstacle was that Chorus had given little away about what it might agree as a negotiated solution, he said.
The report from Ernst & Young contained "no new information in it really", he said.